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April 21, 2011

Sizing The Cloud


Understanding And Quantifying The Future Of Cloud Computing by Stefan Ried, Ph.D., Holger Kisker, Ph.D. with Pascal Matzke, Andrew Bartels, Miroslaw Lisserman

Executive Summary
Building a solid cloud computing strategy and business plan requires insights into the future market size and growth dynamics of this still complex market. In this report, Forrester provides a global market forecast for cloud computing and its various submarkets in this space. Based on Forrester's previously published cloud market taxonomy, we provide forecasts and information on 12 distinct market segments of cloud computing for the 10 years from 2010 to 2020. Note that, in this report, we forecast shifts in the usage patterns of infrastructure, platform software, and business applications. Readers should fully understand the definitions of each segment listed and the expected patterns of change to draw the proper conclusions from this forecast. Vendor strategists can use this report to check their own assumptions, build their cloud business plan on solid numbers, and map their current and future portfolio to the defined market segments of the taxonomy.

MAKING SENSE OF CLOUD COMPLEXITY


With cloud computing attracting such high public attention, vendor strategists are under pressure to craft solid business plans that prepare their companies for cloud market success. But to tap into sustainable and profitable revenue growth, vendors first need to understand the specific complexities and dynamics of this heterogeneous, rapidly evolving market space. In Forrester's previously published cloud taxonomy, we defined 12 distinct cloud market segments, each with its own specific maturity cycle and market growth dynamics.

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Vendor strategists need to take into account the different parameters that frame the growth patterns and market sizes of the cloud spaces that they are targeting. In particular, they should note that the various cloud segments: Reveal different levels of market maturity. While some cloud segments are already fairly mature, others are just emerging. Address different client constituencies and needs. Unlike technology market segments that focus on restricted target stakeholder groups and categories, cloud computing solutions address the needs of a broad variety of client groups. Cloud propositions are compelling to individual end users, corporate buyers, and tech providers such as independent software vendors (ISVs). As a result, the benefits of cloud computing range from personal productivity to operational flexibility to cost savings. Rely on partnerships to provide end-to-end solutions. Given the complexity of the task and the fragmentation of the market landscape, only a small group of providers can possibly cover the cloud value chain from end to end.

SIZING THE CLOUD COMPUTING MARKETS


Forrester forecasts that the global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in 2020. In this report, we outline the different market dynamics for the three core layers of cloud computing the public cloud, the virtual private cloud, and the private cloud and determine the current and future size of these markets.

Public Cloud Markets


The total size of the public cloud market will grow from $25.5 billion in 2011 to $159.3 billion in 2020.

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The public cloud includes IT resources that are delivered as services via the public Internet in a standardized, self-service, and pay-per-use way. These services are highly standardized allowing limited customization and their respective resources are massively shared. The public cloud market is divided into various submarkets, according to the resources used: an infrastructure market (infrastructure-as-a-service [IaaS]); a software platform market (platform-as-a-service [PaaS]); an application market (SaaS); and a market that offers standardized and shared end-to-end business processes via the public Internet (BPaaS).

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The Growth Dynamics Of The Virtual Private Cloud

Forecast: Global Virtual Private Cloud Market Size, 2011 To 2010

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